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Capacity Development for the Deployment of Demand Response (DR) in South Africa to Mitigate against Carbon Emissions and Electricity Supply Shortages

South African wind turbines
This technical assistance advances the following Sustainable Development Goals:

Affordable and clean energy

CTCN
Goal7
Name:
Affordable and clean energy

Context

South Africa is facing serious electricity supply capacity challenges. Eskom, the largest producer of electricity in South Africa, has resorted to load shedding in order to reduce peak loads, which has resulted in disruptions to businesses and the public. About 90% of electricity supplied in South Africa is produced from coal, rendering coal power plants responsible for around 80% of total emissions in the country. The government approved an Integrated Resource Plan in 2019, detailing the procurement of renewable energy sources up to 2030. According to this resource plan, renewable energy will comprise 37% of the power to be generated by 2030, with wind and solar power among the largest contributors. However, electricity generation from these sources is variable. In order to integrate renewable energy sources into the grid, Eskom and the municipalities need to address the potential load shape challenges while confronting other ongoing challenges such as costly transmission and distribution upgrades, the retirement of old power plants, and the need to design for resilience in the wake of climate change and natural disasters. Demand Response (DR) is becoming an important resource to meet energy demand and flexibility in power systems because it has the potential to reduce peak demand and provide the flexibility for the integration of a high proportion of renewable energy into the power system. Therefore, the current DR programs need to be expanded beyond energy intensive users to include residential and small to medium size industrial and commercial customers. The uptake of the established DR programs thus far has been low.

The barriers to its wider adoption and deployment are not only technological but regulatory. It is important to ensure that electricity consumers understand what DR is, and how they can participate in and benefit from its deployment. An effective communication infrastructure is also necessary to provide connectivity to different energy systems, devices and applications. Standardization is needed, as flexibility cannot be identified and exploited without it, and since this may also be a barrier if investors are concerned about becoming “locked‐in” to a particular supplier, which may result in future sub-optimal decision-making.

A study is required to assess the operational feasibility, as well as costs and benefits to assess the feasibility of actual DR implementation within the South African grid balancing system. 

CTCN Support

CTCN will provide technical assistance to start the program and build capacity by working with international technical experts. This will include the following:

  • High‐level economic assessment of demand for DR services from a systems perspective;
  • DR potential assessment across South Africa;
  • Assessment of the potential value creation of DR;
  • Identification of the technology requirements for actual implementation;
  • Recommendations to resolve regulatory challenges; and
  • Capacity building and training of the research team. 

Expected Impact

The wider adaptation and implementation of DR in the South African market can have a positive impact on the whole population, including the residential sector, enabling the democratization of the energy sector through the participation of individual households in the electricity market and the ultimate lowering of energy costs. 

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    Phase:
    Review